With its patents, Lego had acquired a virtual monopoly position in the market of toy building blocks. Now those patents have expired, competitors see opportunities in that market. As the public needs blocks that can be exchanged with the Lego blocks, the competition is trying to design products that match Lego’s blocks as much as possible. Whereas Lego is trying to prevent that from happening, it is not always successful. This time, however, Banbao, a competitor from Venlo, went too far in its imitation of Lego products.
Banbao marketed basic building blocks, figures and other construction elements that displayed a tremendous similarity to the blocks, figures and elements of Lego. Banbao’s packaging also corresponded significantly with Lego’s packaging.
Lego summoned Banbao to appear in preliminary relief proceedings, relying on slavish imitation of the basic building blocks and the construction elements, as well as the copyrights relating to the figures and the packaging.
In its defence against the asserted slavish imitation, Banbao relied on a ruling of the Supreme Court of the Netherlands from 2009, on which we have previously reported. The Supreme Court confirmed in that ruling that Lego’s blocks may in principle be imitated, since there was a need under the public for compatibility and exchangeability with the Lego blocks. According to the Supreme Court, however, this need for standardisation does not quite mean that every imitation is lawful. The imitator must do everything that is reasonably possible and necessary for preventing the creation or exacerbation of confusion in spite of the similarity of the shape due to the need for standardisation. It was in that context that the Supreme Court ruled that exterior differences between the blocks in terms of colour and paternity right or the placement thereof could suffice to prevent the risk of confusion.
The present case is interesting, because Banbao did not use any other colours and also did not place any name on its blocks. Banbao relied on a (miniscule) difference in the dimensions, the use of other materials and the presence of a little dent in one of the studs of one of the building blocks. The Court ruled that these distinguishing characteristics were insufficient in preventing the risk of confusion, whereby the Court deemed it of importance that such small differences are not noted by the public, as the portion of the public that buys these blocks is generally not very observant and does not see the products next to each other. It was the absence of a name on Banbao’s blocks that appears to be decisive here. In addition, Banbao could, when asked by the Court, not put forward a well-founded argument as to why it had not placed any name on its blocks. Partially for that reason, the Court ruled that confusion was unnecessarily being created. It is not explicitly evident from the judgment that mere placement of the name by Banbao would have been sufficient for preventing the risk of confusion. That remains an interesting question that must be answered in another case. I suspect that the answer will be positive, certainly if the name is placed in an eye-catching location.
For the remaining construction elements (such as a hard hat, a flag, a wheel, a horn or a tree), the defence on the grounds of the need for standardisation does not hold. Consequently, for those elements Banbao had put forward another defence, specifically that in its design Lego had failed to give these elements their own identity, because it had used banal shapes derived from reality. The Court does not follow that defence. Lego’s construction elements are not designed in the usual way and are most certainly distinguished from other similar elements on the market. Since Banbao has not designed its construction elements in such a manner that the design was sufficiently disassociated (slavishly copied) from Lego’s design, unlawful imitation exists. As regards a police hat, a regulation helmet and a garden fence, the Court assumed that in the design thereof Lego has indeed not deviated from that which is usual in terms of design and that it therefore has not featured in the market. Imitation of these elements is in that case indeed permitted.
Banbao has also imitated figures. For the protection of the design thereof, Lego invoked its copyrights. The Court first assessed whether the figures were in fact protected by copyright. Banbao put forth the defence that the shape of the figures is determined by technical requirements, as the parts must be exchangeable with other parts and the figures must be able to stand and sit. That argument was rejected, because the design is determined only to a limited degree by these technical requirements and, as for the rest, there is still sufficient space for a creative contribution on the part of the maker. The figures are therefore protected by copyright. Has an infringement taken place then? In respect of the design constraints of the figures, Banbao did not sufficiently disassociate (almost identically copied) from the design of Lego’s figures. Consequently, the Court concluded that Banbao’s figures were derived from Lego’s figures and infringe upon Lego’s copyrights.
Banbao’s packaging was also deemed to be copyright infringement. In spite of the differences that were present, the Court ruled that the characteristic features of the Lego packaging that are protected by copyright had been copied by Banbao, which lead to the Court assuming the infringement.
The Court consequently ordered Banbao to discontinue selling and offering the illicit imitation products within two weeks and to remove the products from the retailers. In addition, Banbao must inform Lego from whom it has received the products.
All in all, this case was successful for Lego. It has drawn the line more clearly as to when imitation of Lego’s popular basic blocks is no longer permitted in spite of the need for standardisation. Unlawful imitation appears to exist in the case of identical basic or other building blocks without another name being placed on them. Moreover, the need for standardisation does not apply to other construction elements or for the figures. In that regard, Lego can invoke a much broader protection on the basis of slavish imitation and/or copyright.